TaxTMI 
TaxTMI 
2017 (1) TMI 256
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....ion 271(1)(c) of the act was initiated separately in respect of the additional income disclosed in the revised return of income filed on 26.12.2011 The assessing officer had imposed penalty of Rs. 2,51,880/-vide order u/s 271(1)(c) of the act passed on 29.06.2012. In this connection, the assessing officer has initiated penalty proceedings u/s. 271(1)(c) r.w.s. Explanation 5A of the Income Tax Act stating that assessee has offered the additional income as result of search action conducted in this case. The assessee has submitted before the assessing officer that he has owned land at bearing survey no. 437 at village Nikol jointly with his father Shri Bhikhabhai Padsala each heaving equal share of land which was sold in the year under consideration . He further stated that at the time of filing of return of income he had computed long term capital gain as long term because this land was acquired initially through banakhat /agreement for sale on 1st Nov, 1994. but for which the purchase deed was registered on 24th Feb, 2006. The income was offered as long term capital gain because of looking to the holding of the said land for three years. The assessee has stated that afterwards, his ....
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.... a discretionary jurisdiction upon the Assessing Authority, inasmuch as the amount of penalty could not be less than the amount of tax sought to be evaded by reason of such concealment of particulars of income, but it may not exceed three times thereof. It was pointed out that the term "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the assessee must be found to have failed to prove that his explanation is not only not bonafide but all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held that the explanation must be preceded by a finding as to how and in what manner, the assessee had furnished the particulars of his income. The Court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the ju'dgment in Dilip N. Shroff's case (supra) was upset. In Dharamendra Textile Processors ' case (supra), after quoting from section 271 extensively and also considering section ....
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....7l(l)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. " 5.1 The courts had taken divergent views on the above issue and even in the case of search when income tax return is revised after search having taken place, concealment of income has been attributed depending upon the facts of the case, nature of evidences found and the Explanation furnished by the assessee. There are instances when even under such circumstances, penalty for concealment has been deleted by the courts. Some of the case laws on this issue having both kind of interpretation are given below:- 5.2 In CIT vs Shyamlal M.Soni (2005) 144 Taxman 666 (MP), High Court held that no penalty under section 271(l)(c) could be levied in a case where income returned in revised returns was accepted and assessed in the hands of the assessee even though revised returns were filed after1 search and subsequent to inquiries made by the department during the course of assessment proceedings. 5.3 In Dy. CIT ....
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....der section 271(1)(c) is\' leviable on the difference between income returned in the original return u/s. 139(1) and in the return U/S.153A. 5.8 In CIT vs A. Sreenivasa Pai (2000) 242 ITR 29 (Ker.), it was held that penalty u/s. 271(1)(c) was leviable in respect of additional income offered by the assessee in the revised return as the same was filed only after the revenue had impounded assessee's books and started inquiries. Return filed so as to include concealed income cannot be treated as revised return. 5.9 However, ratio of the above decisions does not apply to the cases covered under Explanation 5A to section 271(1)(c) as there is considerable change in the language of Explanation 5 and 5A. After the insertion of explanation 5A to section 271(1)(c) the idea of deliberateness implicit in the word 'conceal' does not have to be established any more. In fact the deeming provision contained in the explanation takes care of the same. The deeming provisions of the explanation 5A to section 271(1)(c) makes it becomes clear that in cases where the search operations have taken place after 1.4.2007 incomes declared in the return filed in response to not....
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....ontrary. The appellant deliberately chose not to include the income which it had earned in the returns of income filed prior to the search and only included them in the returns of income filed after the search in response to notices issued by department u/s 153A, even though it knew fully well that the income was to be included in the earlier return filed. It is also clear that such incomes would not have been declared had a search not taken place. Further as per the deeming provision of explanation 5A to section 271(1)(c) such incomes are deemed to be concealment within the meaning of section 271(1)(c). In such a situation argument of the appellant that income has been voluntarily declared and therefore penalty u/s. 271(1)(c) is not leviable, is not acceptable. 5.13 In view of the above the penalty levied by the AO u/s 271(1)(c) is justified. The same is confirmed." 5. During the course of appellate proceedings before us, the learned counsel contended that initially the assessee had offered income as long term capital gain because of indexation because period of holding was required to be calculated from the date of registration of purchase document and not from the da....